If you are running a charity or trust in Britain or the USA, there is no minimum required spend on charitable purposes. So one could have a charity that takes several hundred thousand pounds a years in donations, and employs many well paid staff. As long as that charity does the bare minimum required by the Charity Commission, there is not a minimum required spend on actual charitable acts.
This is crucial, this means that by having a basic website, and indulging in some basic public work, leafleting & marketing, an organization can qualify as being a charity. One only has to look at the scandal of ‘Atlantic Bridge’ involving Liam Fox & Adam Werritty, to see this charity model in place there.
Charities are ripe for exploitation for the following reasons.
- Money laundering: – charities are the perfect way to launder money via anonymous donations.
- Self-regulation & minimal oversight make it very easy to hide bad or illegal practices.
- No minimum spend on the actual charitable acts.
- No maximum spend on ‘fund-raising costs’.
- No Tax
Whilst I am not implying that all charities operate in such a self-interested way, there is evidence that many charities are failing to deliver on the most basic of requirements. The following are just a few examples that I have found.
The charity ‘Atlantic Bridge’ ran for some 4 years without notice until a suspicious blogger flagged it to the charity commission and it all came undone. Stephen Newton the political blogger in question, who uncovered the scandal also points out that he had notified the charity commission earlier in 2009 but they failed to do anything about it.
British Friends of Hazon Yeshaya is another charity that has been caught up in a fraud scandal. Its purpose is to provide soup kitchens for the (Jewish) poor and needy in Israel. The charity raised over £750 000 last year, all the money went abroad to Israel, yet it failed to make the 14 000 meals a day which it was supposed to. Despite this it is still fund-raising in the UK.
The CST (Community Security Trust) is a Jewish charitable trust that has just been awarded a grant from the public purse. The grant of £2 million to Jewish Schools for security guards (CST security guards I bet) was issued by Michael Gove (Education secretary), despite him being listed on the CST advisory board. No conflict of interest here then. Coincidentally, Michael Gove has also received money from the CFI (Unincorporated_association – another type of charity) in 2005, and his islamophobic book ‘Celsius 7/7’ is free when you join the CST. Let us review these facts: –
- 2005 Michael Gove receives ‘donations’ from the Conservative Friends of Israel.
- His Book ‘Celsius 7/7‘ is free for every CST member. Presumably he will have got something for this islamophobic promotion.
- He is on the CST advisory board.
- He awards a £2 million grant from public money for Jewish-only Schools.
Gove’s book is a confused epic of simplistic incomprehension, riddled with more factual errors and misconceptions than any other text I have come across in two decades of reviewing books on this subject. 
William Dalrymple, A global crisis of understanding, The Times, 24 September-2009.
Here is a very interesting video from Michael Gove who seeks to encourage Islamophobia through his book.
Finally, from my personal work experience in the ‘third sector’ in two charity organizations I worked in, I was told by the staff, that they typically spend 10-20% of their turnover on charitable acts. It is clear that many charities are failing to deliver help to those that they say they support, or are just under-cover organizations designed to extract money and support from people who often have the best of intentions.
“The road to hell is paved with good intentions” source.
Until we see proper regulation, transparency and accountability, the ‘third sector’ will continue to be plagued by corruption and fraud. It has become glaringly obvious that some charities & trusts are using the cover of their ‘good intentions’ to pursue their own quite separate and sometimes contradictory agendas.